What does the non-compliance cure costs and fee cover for a Desi District franchise?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Special inspection fee | Currently $600, plus our out-of-pocket costs | On demand | Payable only if we conduct an inspection of your business because of a governmental report, customer complaint or other customer feedback, or your default or non-compliance with any system specification. |
| Non-compliance cure costs and fee | Our out-of-pocket costs and internal cost allocation, plus 10% |
Source: Item 6 — OTHER FEES (FDD pages 16–20)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the non-compliance cure costs and fee covers expenses incurred by Desi District when they take action to correct a franchisee's non-compliance with the franchise agreement. This means that if a Desi District franchisee fails to meet certain requirements, such as maintaining required insurance coverage, Desi District may step in to rectify the situation on the franchisee's behalf.
The fee includes Desi District's out-of-pocket costs, internal cost allocation, plus an additional 10% administrative fee. For example, if the franchisee does not have the required insurance, Desi District may purchase the insurance for them. The franchisee is then responsible for reimbursing Desi District for the cost of the insurance, plus the 10% administrative fee.
This fee is due when billed to the franchisee. It is important for prospective franchisees to understand that failing to comply with the franchise agreement can result in additional costs beyond the initial investment. Franchisees should ensure they understand and adhere to all requirements outlined in the franchise agreement to avoid incurring these non-compliance cure costs and fees.